13:54 - 12.05.2020

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May 12, Fineko/abc.az. The Central Bank of Azerbaijan canceled the license of two banks - AGBank and NBCBank.

According to the CBA, this decision came into force on 12 May 2020.

Earlier it was reported that both banks have been temporarily administrated since 27 April 2020.

"The assessment conducted by the interim administrators of the banks once again showed their unsatisfactory financial situation, loss of capital and serious problems with liquidity," the CBA said in a statement.

The CBA reports that non-performing loans accounted for 54% or AZN 73 million of NBCBank's loan portfolio (excluding mortgage loans given at the expense of the Azerbaijan Mortgage & Credit Guarantee Fund). After the correction in the reserves, it was found out that the negative value of the Bank's total capital is AZN 24 million, to restore the capital position required by law (AZN 50 million), the bank needs additional capital in the amount of AZN 74 million. In addition, the bank regularly misrepresented its financial statements.

The share of non-performing loans in AGBank, according to the results of inspections, made up 51% of the total portfolio as of 30 April 2020. After the correction in the reserves, it was revealed that the negative value of the total capital is AZN 167 million, and the bank needs an additional AZN 217 million to restore the capital position required by law (AZN 50 million).

"Taking into account these facts and the fact that banks cannot fulfill their obligations to creditors, the Central Bank’s Board decided to revoke the licenses of AGBank and NBCBank from 12 May. The regulator also appealed to the court to declare them bankrupt and further liquidate them," the CBA’s statement says.

Thus, the total number of banks licensed to operate in Azerbaijan is 26.

AGBank was founded in 1992 and was one of the Top 15 banks in Azerbaijan.

NBCBank was established in December 1992. The Bank's shareholders are two legal entities (share: 8.75%) and seven individuals (share: 91.25%).